Private Company Limited by Shares

The most common type of company incorporated for the purpose of carrying on business is a company limited by shares. The requirements to form a local company limited by shares are:

• • A minimum of one subscriber to the share of the company
  • A minimum of one director (Section 196 of the CA)
  • A company secretary – this can either be an individual who is a member of a professional body prescribed by the Minister of Domestic Trade and Consumer Affairs, or an individual licensed by the CCM.

Both the director and company secretary shall have their principal or only place of residence within Malaysia (Sections 296 and 235 of the CA).

Incorporation procedures of a company are:

Name Search and Application for Name

An official name search application must be conducted to determine whether the proposed name of the company is available. When the proposed company name is approved by the CCM, it is valid for 30 days from the date of approval, renewable every 30 days with a maximum of 180 days.

In the application, it is also required to clarify the meaning of any letter of the alphabet stated in the name, and to give explanation if the name is not in Bahasa Malaysia or English. The nature of business to be carried out and the names of promoters (with their Nric / Passport numbers / email address) is also required to be stated.

Lodgement of Incorporation Documents

Incorporation documents (as explained below) must be submitted to the CCM within 30 days from the date of the approval of the company’s name, failing which a fresh application for a name search must be done, or to apply for extension (limit to 5 times).

Incorporation documents required:

1. Section 201 (Declaration by a Director or Promoter before Appointment as promoter before incorporation)

The director or promoter declares that he/she is not bankrupt and has not been convicted and imprisoned.

Post Incorporation:

1. Constitution – Optional

• • An original copy of the Constitution need to be stamped by the Stamp Office of the Inland Revenue Board at a fee of RM 200.
  • The nature of business of the company will be stated in the object clause in the Constitution

2. Appointment of Secretary

Section 236(3) CA – Declaration by Person before Appointment as Secretary

The first Company Secretary required to be appointed within 1 month from the date of incorporation

Notice of Incorporation

A notice of incorporation will be issued by the CCM upon compliance with the incorporation procedures. A copy of the Certification of Incorporation could be applied from CCM.

A company is advised to obtain the required license /permit /approval from other relevant authorities (eg premises license, construction permit, etc) before carrying on its business.

Maintenance of a Local Company

Generally, a local company is required to:

• Lodge the annual return to CCM within 30 days from the date of anniversary of the company
• The Directors of every company shall prepare audited financial statement (AFS)

1. 1. Within 18 months from the date of its incorporation; and
   2. Subsequently, within 6 months of its financial year

• Circulate the AFS to the members, auditors and debenture holders within 6 months from the date of financial year end (S258, CA 2016) and
• Lodge the AFS to CCM within 30 days from the circulation date (S259, CA 2016)
• Lodge statutory documents when there are changes in the registered particulars [Section 58 – Return Giving Particulars in Register of Directors, Managers and Secretaries and Changes of Particulars], registered office [Section 46(3) – Notice of Situation of Registered Office and Office Hours and Particulars of Changes] or matters relating to share capital of the company [Section 78 – Return of Allotment of Shares]
• Lodge various other statutory documents that need to be notified or registered with the CCM, e.g. Section 76 (Authority to issue shares)

For an exempt private company (a private company having not more than 20 members, none of whom are corporations having direct or indirect interest in its shares) that is solvent, the attachment of the audited accounts may be substituted by a certificate signed by a director, a company secretary and auditor, declaring that:

• The company is an exempt private company;
• The AFS has been circulated to its members; and
• The company is able to meet it liabilities as and when they fall due as at the date of the audited profit and loss account.

Section 245 of the CA requires every company and the directors and managers thereof to keep such accounting and other records that would enable true and fair profit-and-loss accounts and balance sheets to be prepared from time to time.